Although Power Line Communication (PLC) is not a new technology, its use to support data transmission over low voltage (LV) distribution networks is still the focus of ongoing research. This thesis focuses on the channel modelling and performance evaluation of narrowband (NB) PLC system. First, the channel modelling approaches of PLC are studied. Then, the proposed PLC channel modelling method based on the bottom-up approach for LV narrowband PLC in a frequency band between 9 kHz and 490 kHz is presented. This proposed model employs the transmission and scattering matrix methods to calculate the transfer function of a typical LV PLC network which comprises two common cable types (copper cables and aluminium conductor steel reinforced). Unlike the top-down approaches, this model is scalable as the network complexity increases and can better describe the network behaviour as a function of physical parameters.In addition, the noise characteristics and popular noise reduction techniques of PLC are studied. The major impairment to the PLC is the impulsive noise which is mainly generated by the switching transient in the network. Hence, a new technique is proposed to mitigate the impact of impulsive noise on data transmission over power lines. This proposed technique is an optimal Clipping/Blanking nonlinearity technique which is based on the minimum bit error rate (BER) search. Results obtained from the simulation of this technique demonstrate that performance has been enhanced in the NB-PLC system. The performance of the narrowband PLC system is also evaluated in both physical (PHY) and medium access control (MAC) layers. Since Orthogonal Frequency Division Multiplexing (OFDM) is a suitable modulation scheme for hostile environment of the power line, it is used to evaluate the PHY layer performance. As a result of the PHY layer performance analyses, it is found that the BER performance between neighbouring points in the typical LV PLC network is reasonable, but communication beyond one hop have to rely on upper layer protocols. In the MAC layer performance evaluation of the PLC system, the widely known random access MAC protocol that uses the Carrier Sense Multiple Access with Collision Avoidance (CSMA/CA) will be utilised. The MAC performance evaluation of the PLC system demonstrates a significant packet loss in LV PLC network even with a light traffic condition due to the noisy channel. Furthermore, the goodput declines abruptly once the individual transmission rate is high enough to block the network. In addition, the simulation results show that the channel errors can be reduced by adjusting the MAC parameters to allow the re-transmissions mechanisms to recoup the lost packets.